Money Master

Though often thought of as an implacable conservative, Arthur Burns, the Federal Reserve chairman under three Presidents, was most of all an economic pragmatist. While the pipe-smoking Burns, who died last week at 83 of complications following triple-bypass heart surgery, sometimes veered from being the crusty advocate of fiscal restraint to being a cautious fueler of the money supply, he always regarded inflation as the chief economic enemy of a democracy.

A native of Austria, Burns taught at Columbia University for two decades until 1953, when he was picked by Dwight Eisenhower to head his Council of Economic Advisers. Burns' most important patron, however, was Richard Nixon, who made him Counsellor to the President in 1968 and head of the Federal Reserve in 1970. When a recession hit shortly after his appointment to the Federal Reserve, Burns doubled the rate at which the Fed increased the supply of dollars. Some critics accused Burns of again sharply expanding the money supply in 1972 to help Nixon's re-election effort.

Later, when inflation flared under Presidents Ford and Carter, Burns raised interest rates in a vain effort to stem the tide. Carter ultimately chose not to reappoint him to the Fed in 1978, but Burns' exile from Government was short: from 1981 to 1985 he served as Ronald Reagan's Ambassador to West Germany, both charming and annoying Germans with his candid lectures.

An intellectually exacting man, Burns knew that economics was an inexact science and that the power of the Fed chairman was somewhat limited. "Anyone who is convinced that he can fine-tune the economy," Burns once said, "doesn't know what he is talking about."